Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments March 8, 2018 erstellt
Beschreibung:
Agents frequently compete for both relative-performance rewards — mutual fund inflows generated by rankings, executive promotions and compensation based on peer comparisons, rank-dependent social status — and absolute-performance rewards — bonus payments for meeting targets, performance fees based on “high-water marks,” wealth from portfolio returns. It is well known that bonus compensation can engender risk-taking. However, we show that introducing bonus rewards into rank-based competitions can reduce risk-taking through the “Atalanta effect”: bonus rewards distract superior competitors from rank competition, thereby leveling the playing field and reducing the need for weak competitors to adopt high downside-risk strategies